December 7, 2022

Nigeria seeks UN intervention on credit rating

Solicits financial support for 2023 Census

By Emmanuel Elebeke

The Federal government on Tuesday urged the United Nations to intervene on high rating of developing nations by the International Credit Rating Agencies.

The minister of Finance, Budget and National Planning, made the appeal when she hosted a delegation of the UN led by Deputy Secretary General, Amina Mohammed in her office in Abuja.

She said unless the intervention is carried out at a very high international level, there will be no relief for the indebted nations.

‘‘We have to cope with Credit Rating Agencies working as if nothing has changed, not realising the kind of exogenous shocks  that we are suffering, assessing us and rating us for factors that are external to us.

We realised that we cannot change it, we engage every credit rating agency, they have to do something about their ratings.  This year alone, we hear Nigeria being downgraded one notch. We have seen some of our sister countries being halt with these ratings.  Unless these interventions are done at a very high international level, there will be no relief for developing nations.’’

‘‘Our countries are faced with very significant levels of debt service obligations, because of COVID, we have to take more loans than we planned for several global events not caused by us, like war in Ukraine, climate incidents etc. So, we have to borrow more than we planned.  There is high inflation and high interest rate.

‘’If Nigeria goes out today, the international Capital Market punishes us with very high rate because we do not have buffers to reduce the cost of borrowing in the international market, whereas an European markets that do not have fundamentals as Nigeria would go and borrow at lower rate. There has to be global support that supports African countries, getting a mechanism that will reduce the cost of our borrowing in the international capital market. We are doing the best we can under very difficult circumstances.’’

Earlier, Ahmed, briefed the UN delegation of the proposed plan for 2023 National Census and general elections, said the projects have eaten deep into the nation’s budget and solicited for UN support.

‘’We acknowledge your smooth financing and support for SDGs. It has also helped us bring the private sector on the table, we appreciate you. With national census plan, the President has put an imbedded adviser with the National Population Commission. Proclamation has been done and the target is to carry it by April after elections.

‘’We are asking the UN for support, it has been very tasking on the government budget. We were told that once a formal proclamation is made, external source of funding will enter but up till now, nothing has come. We really need interventions.’’

‘’Again on SGRs, it came on time and it helped us recover from COVID-19, we were excited when developed countries made commitment to redistribution of SGRs. We are concerned that there have been commitments, but not much progress in terms of realising those SDRs with the use of countries for the benefit of our people.  If the UN can put their weight behind these efforts, it will be very much appreciated,’’ she added.

The minister who enlightened the visitors on the energy transition plan of federal government, said, “Energy Transition in Nigeria is designed for transition to be driven by investing in gas. Our targets are two. First of all to attain energy sufficiency by 2030, and to provide a better livelihood for the people. Therefore, we need to invest in gas for domestic purposes. Even though, there are commitment, the momentum is very slow. The intension is there but is actually, subjective. It requires the UN to support us in that regard.’’

She further reminded the UN about some of the achievements of  the  administration, ranging from national security, food security, good governance and rule of law, anti-corruption, PIA and infrastructure, debt sustainability and economic recovery from recession.

She however, informed that the economy has been projected to close the year with GDP projection of 3.57%.

Earlier, the head of the UN delegation and DSG, Amina Mohammed said, they were in Nigeria to strengthen relationship with Nigeria, ascertain the level of her recovery from COVID-19, Ukraine/Russia war and the attendant energy crisis and appreciate the areas that require support.

The UN representative, who commended the administration for prioritising infrastructure development and its strides in security challenge over the last 7 and half years pledged the support of the global body to the 2023 elections and peace transition.

‘’We are ready to share gaps where they exist and to assist in closing them. What was clear to us is the kind of strength we are seeing in developing countries are not conducive to capacity of the situation. There has to be use of old tools to define their risks. You have to leverage tools for international market to address your debt challenges.

‘’The SG has also asked us to look at the redesign of the financial architecture, it has to be redesigned the way states are structured to access credits,’’ she added.

While admonishing Nigeria on how to overcome its economic crisis, the UN Deputy scribe urged federal government to  review fuel subsidy  and urged her to scale up investment in social protection, education and infrastructure .